Infrastructure in favour as Legg Mason RARE Income fund sees flows of over £140M in one month
Investors looking for assets which provide them with a steady income and attractive total return in this low growth environment, have helped send assets under management in the Legg Mason IF RARE Global Infrastructure Income fund to over £140m just a month after launch.
The fund, managed by infrastructure specialist RARE’s co-CEO and CIOs Nick Langley and Richard Elmslie, focuses solely on the listed infrastructure space, with the majority of assets invested in essential utilities such as water, gas and electricity.
The globally-diversified fund will target a high level of income, expected to be c.5% p.a., and a real total return of G7 inflation plus 5.5% p.a.[2], over a market cycle.
Having launched on 1st July, the fund took £26m on day one from multiple clients, and has since seen continued interest from investors looking for a truly diversified source of income with assets now having gone through the £140m mark.
Thomas Becket, Chief Investment Officer at Psigma, said the fund helped reduce the beta of his multi-asset portfolios, as well as providing an attractive yield.
“The global economy has suffered a series of setbacks in recent months, and many assets now look either very expensive, or vulnerable to a correction,” he said.
“In that environment, to be able to access an alternative source of income with both an attractive yield and good liquidity is very compelling.”
Tom Jemmett, Fund Analyst at Brewin Dolphin added:
“We’ve been investing in listed infrastructure for some time now as we feel the sector offers a more liquid and diversified route than investing directly, whilst offering the potential for good capital growth with inflation-protected income. Notwithstanding the defensive qualities a strategy tilted towards regulated global utilities should bring, we like the RARE Income fund as it helps diversify our current exposure whilst providing an income premium.”
As well as focusing on infrastructure assets within the ‘essential services’ space which are more insulated from shifts in global growth, RARE’s fund is also diversified globally, with exposure to North American and Asia Pacific markets, as well as European-listed infrastructure assets. It also offers the chance to benefit from some of the fastest growing regions around the world, with up to 20% invested in developing countries.
Commenting on the landmark level of assets already raised, Nick Langley said: “We are delighted with the response from investors since launch. Our goal is to provide much needed income, by investing in the most secure types of listed infrastructure, and it is clear our message has resonated with the needs of clients
[2] Under current market conditions net of withholding tax, over a market cycle. This is an internal guideline only. These are targets and there is no guarantee that they will be met. Past performance is not a reliable indicator of future results.
[1] As at 8th August 2016, source: Statestreet
[1] Under current market conditions net of withholding tax, over a market cycle. This is an internal guideline only. These are targets and there is no guarantee that they will be met. Past performance is not a reliable indicator of future results.